UK Competitiveness

Oral Answers to Questions — Business, Innovation and Skills – in the House of Commons at 9:30 am on 11th September 2014.

Alert me about debates like this

Photo of Robin Walker Robin Walker Conservative, Worcester 9:30 am, 11th September 2014

What recent assessment he has made of the competitiveness of the UK as a place to do business.

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

Last week, the World Economic Forum released its annual assessment of international competitiveness. The UK rose in the rankings to ninth place, and in relation to the responsibilities of my Department, to fourth place for labour markets and to second in the world for technological readiness and innovation. This is further evidence that our economic policies are delivering a more competitive economy. We are delivering on our commitment to make Britain the best place in the world to start and grow a business.

Photo of Robin Walker Robin Walker Conservative, Worcester

I am grateful to the Secretary of State for that answer. I congratulate him and the Department on that progress. This Government have put making the UK the best place in the world to start a business right at the heart of that strategy, and businesses in Worcester are embracing that challenge. Does my right hon. Friend agree that it is a huge achievement that, since 2010, about 2,800 new businesses have been started in Worcester?

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

And not only in Worcester. Indeed, one of the most rapidly growing programmes, operating through the British business bank, is the start-up loans scheme. My hon. Friend may be aware that approximately 19,000 start-up loans have now been made, with a value of over £100 million.

Photo of Dennis Skinner Dennis Skinner Labour, Bolsover

One business that is not growing—the Business Secretary knows that as well as me, because we met him a few weeks ago to talk about its demise—is the deep-mine coal industry. There are only three pits left now. Does he really want to preside over the demise of the last deep-mine coal pits in Britain? Two of them are in Yorkshire, and one is in Nottinghamshire. They are reaching the end of their lives, but they have reserves that should be exhausted. I have got a plan, and he knows about it. The Government should apply for state aid and get £70 million, which is only a tiny proportion of the £700 million that this Government took from the National Union of Mineworkers pension fund in February. That is all we need in order for those three pits—Hatfield, Thoresby and Kellingley—to be able to exhaust their reserves. Those are the conditions in Europe. Why does he not apply for the money, instead of being led by the Tories surrounding him, who are determined to see the end of the pits in Britain?

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

The hon. Gentleman is right that we had a very good and constructive meeting with him and his colleagues on the future of the remaining deep-mine pits. He will be aware, because I think we explained this, that the state aid issue is much more difficult than he—

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

I fear it is. I think that the hon. Gentleman will also recall that most of the deep-mine pits closed under the previous Government. However, we indicated that we were willing to advance a loan to make the closure of the pits a lot less brutal than it otherwise would be.

Photo of David Davies David Davies Chair, Welsh Affairs Committee

RBS has today recognised the competitiveness of the UK, or at least the southern part of the UK—the bits that are run by the coalition Government. Does my right hon. Friend agree that if RBS wants to domicile itself in the southern part of the United Kingdom, it should bring its jobs with it and not expect us to underwrite any mistakes that it may make in future?

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

As it happens, I met the chief executive of RBS a couple of days ago. It is making good progress on sorting out the problems with its balance sheet and returning to normal business lending. I have been pointing out for quite a long time that the position of RBS in an independent Scotland would be very difficult, since its balance sheet is 10 times the size of the Scottish economy. It could hardly operate within Scotland as an independent country.

Photo of Andrew Miller Andrew Miller Chair, Science and Technology Committee (Commons)

Under the seventh framework programme, our universities were incredibly successful at accessing money, but our SMEs were not. Under Horizon 2020—the next programme —what steps will Her Majesty’s Government take to improve the lot of SMEs? Secondly, will the Secretary of State confirm that universities such as Edinburgh, which were hugely successful under framework 7, will not be successful if the vote goes the wrong way next week?

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

On the hon. Gentleman’s latter point, he is right that Scottish institutions benefit disproportionately from UK research because of the excellence of their work and that they would no longer be guaranteed access to UK funding streams in an independent Scotland, although I hope they would maintain their excellence. We will certainly try to ensure that SMEs are taken properly into account in the competition for European funding. His point is a good one.

Photo of Mark Pawsey Mark Pawsey Conservative, Rugby

A recent report showed that reshoring is increasing across the economy. That happens when UK companies source more of their products from the UK. It is estimated that over the next 10 years, that could create 200,000 jobs and boost output by up to £12 billion. Does the Secretary of State agree that that is an effective demonstration of the increasing competitiveness of the UK economy?

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

It is. Indeed, reshoring is happening in somewhat surprising areas. I had a meeting only yesterday with representatives of the British textile industry, which almost disappeared years ago. A significant amount of reshoring is taking place because companies want to be close to the market and regard the business environment as attractive. The same is happening in the aerospace supply chain and elsewhere. We are doing what we can to support that through the regional growth fund and other Government schemes.

Photo of David Hanson David Hanson Shadow Minister (Home Affairs)

Does the Secretary of State accept that companies such as Airbus, which is close to my constituency and which employs thousands of people, are successful and competitive because they work with German, French and Spanish colleagues to produce world-class planes? Does he agree that it is therefore essential that we remain part of a Europe-wide Union to ensure that we remain competitive?

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

The right hon. Gentleman is absolutely right. The Airbus factory in north Wales is an extraordinarily impressive part of British manufacturing. Most of us who have been there have been overwhelmed by the quality of its work. He is right that it is a European company and that it could not operate on any other basis than as a European network. Another key factor in its success has been the industrial strategy and the support that it receives through the aerospace growth partnership.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Health), Shadow DUP Spokesperson (Transport), Shadow DUP Spokesperson (Human Rights)

Northern Ireland is becoming a vital part of the United Kingdom’s business, trade and investment sector. It is showing clearly what it can do within the United Kingdom. Last week, Magellan Aerospace announced a £6-million investment and 47 new jobs in my constituency. Alongside that, there has been a £6.8 million investment in an advanced engineering and competitiveness centre for Northern Ireland, based in Belfast. Will the Secretary of State, in conjunction with the Northern Ireland Assembly and the Minister of Enterprise, Trade and Investment, Arlene Foster, develop innovative solutions in the advanced engineering sector, which are crucial to competitiveness and the growth of the British aerospace industry?

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

Indeed, we will. I have had good discussions with Northern Ireland colleagues about the very successful advanced manufacturing sector. Bombardier has an expanding presence in Belfast, as the hon. Gentleman will know, and there are other parts of the aerospace supply chain that we are keen to develop in Northern Ireland.

Photo of Chuka Umunna Chuka Umunna Shadow Secretary of State for Business, Innovation and Skills

Before I ask my question, I am sure that on the anniversary of 9/11 the whole House will want to remember those who lost their lives, including British citizens, on that terrible day 13 years ago. Our thoughts, best wishes and prayers go out to their families and friends.

Scotland’s vibrant financial services sector is important to the UK’s competitiveness, and more particularly to Scotland’s competitiveness in the global marketplace. RBS has been mentioned, and no doubt the Secretary of State will also have heard Lloyds bank and Clydesdale bank say that they will relocate their headquarters to London in the event of separation. The vote next week is, of course, for the Scottish people, but does that not illustrate the lorry load of uncertainty for jobs, competitiveness and growth in Scotland that will come with the break-up of one of the most successful unions the world has ever seen?

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

I absolutely agree with the hon. Gentleman and he makes the point well. In addition to the lists of institutions he has just given, Standard Life in the insurance sector has made it clear that it could not remain in Scotland were it to be an independent country. That relates to the need for large financial institutions to have a regulator, and in some cases a lender of last resort. A country the size of an independent Scotland would not be able to support those institutions. The hon. Gentleman is absolutely right in his approach.